39 F. 738 -

39 F1d 738

Case Text

138

FEDERAL REPORTiR,

39.

that is to say, during the pleasure .of the board; and in this view the doctrine is perhaps applicable that" grants of franchises and special privileges are always to be construedmoi'lt strongly against the donee and in favor of the public.". Turnpike Co. v. Illinois, 96 D., S. 63; Slidell v. Grandjean, 111 U. S. 412,4 Sup. Ct. Rep. 475; Navigation Co. v. Railway Co., 130 U. S. 1, 9 Sup. Ct. Rep. 409. But aside from this doctrine, and conceding that the complainants have a contract which should be interpreted by the ordinary rules, there is in it no such ambiguity or incompleteness as to admit of extraneous evidence to explain its meaning, or to enlarge its scope. The affidavits, therefore, introduced on the proposition of complainants that the parties intended a contract for six years, must be rejected, and the intention must be deduced from the written proposition of complainants, and the resolution of acceptance by the board; and from these, as already stated, it does not appear that any term of use was stipulated. The requirement in section 4436, that no text-book adopted by the county board shall be changed within six years from the date of adoption, in no manner helps out the claim of the complainants for a contract or privilege for six years, because that provision has no application to cities i and even if applicable, it could lelld no force to the contract, because, by the unanimous consent of the county board, changes could be made at any time. It is suggested, however, that by its by-laws the board can,make no change of text-books except at its April session, and consequently there can be no action upon the subject now, except it be under the act of the legislature referred to, and therefore the validity of that act is in issue, even if plaintiffs' contract be for no definite term of use. The sufficient answer to this is that, by the terms of the by-law, changes may be made at any time by a two-thirds vote of the members of the board. It follows that the application for a temporary restraining order must be denied; and it is so ordered.

FARRINGTON

et' al. v.

TOURTELOTT.

(Circuit Court,

w: n. Missouri, w: n.

Sep,tember 2, 1889.)

1.

SPECIFIC PERFORMANCE.,...CONTRACT-

Plaintiffs filed a bill for the speCific performance ,of a contract to purchase certain land on delivery to the defendant of an abstract of title showing the property to be free from all incumbrances, and alleged performance on their part. Defendant alleged that a railway had a right of way over the land for 20 years. Plaintiffs filed an amended complaint. alleging that defendant knew of such fact at the time the contract was made. and that the right of way enhanced the value of the property within the knowledge of both parties to the contract. Held, that a demurrer to the amended bill must be SUBtained on the ground that plaintiffs have sought therein to contradict and vary a written contract.

2. SAME. Such right of way is an incumbrance on the property.

FARRlNGTON V. TOURTELOTT.

In Equity. Bill for specific performance. Crittenden, McDougal & Stiles, for plaintiffs. Pratt, McCrary, Ferry & Hageman, for. defendant.
PHItIPS, J.. This is a bill for specific performance of a contract respecting the sale of certain real estate situated in the west bottoms of Kansas City, Mo. The contract provides, among other things, that"The sellers are to furnish, within five days from the date hereof, a complete abstract of title to said property from United Statesgovernment, and such usual certificates as may be required by the buyer as to judgnwnts and me· chanics' liens; * * * and the buyer to have twenty days for the exam· ination thereof. * * * If,uponexamination, it is found that the sellers have a good title in fee to said property, they are to execute and deliver to the buyer, or order, a general warranty deed thereto, properly executed, and fre.e. and clear of allliells and incumbrances whatsoever, except only such as are to be assumed by the buyer."

To the original bill filed herein the respondent interposed as a defense that at the time of the making of the contract there was, and now is, au incumbrance on the real in the form of an easement in favor of the Missouri PacHic Railway QOU1pany, as assignee of one George Fowler, for laying down and maintaining a railroad track thereon for a period of 20 years, which said track has. been built, and is now in use thereon. To avoid this allegation of the answer the complainants have filed an amended bill, in which, among other things, it is aB8ged, in avoidance of said alleged incumbrance, that during the negotiations for the purchase of said premises the complainants and respondent went upon said property, and made a personal examination and inspection of the same; that said respondent saw and understood that said strip was being used for said railroad right of way; that he was informed of the length of time said easement was to exist; and that respondent underi'tood and regarded said railroad track for switching purposes to be a valuable privilege, greatly enhancing the market value of said premises; and that said fact, so known to the plll'chaser, was the inducement which finally led him to the agreement; and that it was the chief consideration of the purchase thereof at the agreed price; and that in drawing the written contract no mention was made of said grant or right of way for the reason that it was well known and understood at the time by all the parties to greatly enhance the value of said premises. To this amended bill the defendant demurs, for the reason that in it complainants have undertaken to contradict and vary the terms of a written contract, and for other general grounds. If the controlling question raised by this demurrer were res n01!O, the conclusion which my sense of right and justice would reach would probably conflict with what seems to be the current American authority. Accepting as true the allegations of the amended bill, the respondent (vendee) contracted for the property after personal inspection of the premises. He saw the railroad track through it, and bought the property because in his opinion this railroad switch enhanced the value of the purchase. To the common sense of mankind it would therefore seem to be a solecontradiction in terms-to say that the purchaser could be heard

FEDERAL' ItEPORTERj

vol. 39.

to assert that that was an incumbrance-a burden-in diminution of the value of the thing bought, which was regarded by both parties as an inducement to the purchase. :Thebest recognized definition, perhaps, of the term "incumbrance" is that given by PARSONS, C. J., in Prescott v. Trneman, 4 Mass. 630: "Every right to or interest in the land granted to the diminution of the value of the land, but consistent with the passing of the fee of it by the conveyance." The diminution of the value of the land being the crucial test, it would seem not unreasonable that where, in the opinion of the purchaser wh,en he bought. and where the real fact confirmed his judgment, the physical condition complained of does not lessen the value of the property, either in the market or its use, it should logically follow that there was no incumbrance to become the subject of an action. And if, on the other hand, it be said that the written contract must' be its own interpreter, without the aid of extrinsic facts, and that presumptively such easement is really an injury, it is answered with much force that the further presumption just as reasonably arises that such injury was in the contemplation of the parties when they made the contract after inspection; and that the purchaser paid, or agreed to pay, a correspondingly less price. Nothing is more natural or usual than that two parties negotiating respecting the price of a piece of property in full view, with obvious physical conditions, calculate the price based on the advantages or disadvantages supposed to arise on such apparent facts. From the opposite doctrine it might result that the purchaser would secure a double compensation for an injury resulting from such incumbrance-First, in taking it into consideration when he closed the contract; and, second, where the deed is executed, by recovering in an action for breach of covenant against incumbrances. The following adjudications support what may be deemed the minority view of this controversy: Whitbeck v. Cook, 15 Johns. 483; Hymes v. Esly, 36 Hun, 147; Patterson v. Arthnrs, 9 Watts. 152; Memmert v. McKeen, 112 Pa. St. 315320,4 At!. Rep. 542; Kv,tzv. McCune, 22 Wis. 628; Smithv. Hughes, 50 Wis. 627, 7 N. W. Rep. 653; Lallande v. Wentz, 18 La. Ann. 290. It is impressive evidence of the fact that the foregoing views are rooted in the popular conviction of justice and right between man and man in such transactions that the legislatures of some of the states, whose courts have held the contrary view, have declared by statute against public roads and the like constituting ari incumbrance. Rawle, Cov. (5th Ed.) § 82. 'Ihe weight of authority, it must be conceded, is the other way; followthe early case of Kellogg v. Ingersoll, 2 Mass. 97, in which it was held that a public roaelover the land conveyed constitutes an incumbrance. The authorities on this subject are collected in the case of Burk v. Hill, 48 Ind. 52. See Rawle, Cov. (5th Ed.) § 82. This doctrine has been extended to an easement like the one in question of a railroad running over the land. The argument in support of this theory proceeds on the assumption that such easement diminishes the value of the land, or that the term "incumbrance" is to have a broader meaning than that given hy Chief Justice PARSONS. It contends that where the property is free from such servitude the purchaser may apply it to such uses and pur-

SCHLESINGER 'V. KANSAS CITY & S. RY. CO.

741

poses as he wills; but when it is subject to such servitude the portion occupied is not subject to his exclusive dominion, nor can he use ahd enjoy the whole and every part thereof as should be the incident of an absolute fee. And in respect to a purchafle with actual knowledge ,of the physical condition of the property at the time of the execution of the contract it is said in Beach v. Miller, 51 Ill. 206:
"A person may warrant an article to be sound when both buyer and seller know it is unsound. So the seller may warrant the quantity or quality of an article he sells, when both parties know that it is not of the quaUty. or does not contain the quantity warranted. In fact the reason the purchaser insists UPOll covenants for title. or a warranty of qualHy or quantity, is because he either knows or fears that the title is not good. or that the article lacks in quantity or quality. If he were perfectly assured on those questions, he would seldom be tenacious in obtaining a covenant or warranty."

The doctrine of this case was followed in a most elaborate discussion in Kellogg v. klalin, 50 Mo. 496, since which the doctrine of that case has been the recognized rule in the courts of this state. To attempt, in this case, to establish in this jurisdiction a different rule, would tend to confusion and uncertainty in the law respecting such contracts. The rights of the citizen under such contracts might be made to depend upon which of the jurisdictions, state or federal, he was drawn into to litigate them. In the absence of a rule established by the highest court in the federal jurisdiction it is a conservative and wise rule to follow the one longest established governing the question in the state court. It follows that the demurrer to the amended bill is sustained. Judgment will go accordingly.

SCHLE'lINGER

et al. v.

KANSAS

CITY & S. Ry. Co. et al.

September 24, 1889.)

-(CircuU Court, W. D. "lB88ouri, W: D.

1.

VENDOR AND VEXDEE-CONVRYANCE' OF RAILROAD-CONTRACT.

'IVhatever may be the effect of an instrument purporting to convey property consisting of the road-bed. etc.. of a railroad, where the grantor receives a consideration and abandons the property of which the grantee takes possession, enters into a new contract with the parties to whom the grantee's title is forfeitable, and completes t1le road, the title no longer remains in the grantor.
FRAUDULENT CONVEYANCES-RrGIITS OF CREDITORS.

2.

Property, to which the grantor's title was subject to speedy forfeiture, con· sisting of the road- bed. etc., of an iucompleted railroad, which had been un cared for for four years, was conveyed in consideration of $100,000 of income railroad bonds, which had a purely speculative value. Held, that a claim aga nst the grantor for damages for breach of contract to purchase materials could not be chargec1upon such property, as having been conveyed without cousideration and in fraud of claimants' rights, where the grantor had never received anythin,g undcr the contract, though it had paid part of the price, and the couveyance was made nine months before either party thereto had ans notice of claimants' intention to make any further Claim.